Published in the ECHO Journal, January 2013
Associations are governed by several documents, perhaps the most important of which is the Covenants, Conditions & Restrictions (CC&Rs) of the common interest development. The CC&Rs, among other things, set forth the duties and responsibilities of the individual owners and the Association, restrictions on what can be built and maintained on the property, and how the duties and responsibilities can be enforced. CC&Rs describe boundaries of areas owned in common and what is individually owned. They often describe exclusive use common areas and easements. Some CC&Rs can be very specific and establish such things as heights and sizes of buildings allowed, parking restrictions, colors of paint and window coverings, particular species of plantings for landscaping, and what can or cannot be placed in yards or patios.
CC&Rs should not be confused with Bylaws, which dictate corporate governance details such as terms of office for directors, how elections are held, and times and places for meetings, or with Articles of Incorporation, which establish the official existence of the mutual non-profit corporation with the state.
What sets the CC&Rs apart from other governing documents is the fact that the CC&Rs are recorded on the property. They are part of the title report and run with the land, binding every owner of the land on which they are recorded.
It is rare to find an owner who has read the CC&Rs thoroughly before buying the property, or even after owning the property for years. It is often not easy reading, and can require legal interpretation. Yet, the buyer/owner is as bound by the terms of the document as if he/she had personally negotiated them and eventually signed the final document. Every party who buys the property is deemed to be on notice of every detail in the CC&Rs.
Covenants Running with the Land
A covenant is a term used in real property law to describe a promise concerning the use of land. Covenants are either affirmative, as in a promise to do something, or negative, a promise to refrain from doing something. At law, when covenants run with the land, owners who did not agree to do something or refrain from doing something can, nevertheless, be compelled to comply with the covenant. A covenant that runs with the land binds not only the person who first agrees to the covenant, but all subsequent purchasers of the land or owners of an interest in the land, even though they do not personally agree to the covenant.
In California, statutes define four types of covenants which run with the land. They are:
- Covenants in a deed or other instrument which benefit the land conveyed;
- Covenants between the owners of properties or between the grantor or grantee to do, or refrain from, some act or acts on the land of the covenantor for the benefit of the land of the covenantee;
- Covenants by a lessor to do, or refrain from doing, or permitting acts on adjoining or nearby property for the benefit of a lessee; and
- Environmental covenants made by owners and grantees of land which are necessary to protect future users.
Civil Code section 1468 sets forth the requirements for a covenant to run with the land, i.e., be binding on subsequent purchasers. The instrument creating the covenant must meet all the following requirements:
- The covenant must be contained in a written instrument.
- The land of the covenantor which is to be affected by the covenant, and the land of the covenantee to be benefited, must be described in the instrument containing the covenant. Without a description of the land to be benefited, the statute is not satisfied and the covenant is merely personal to the covenantor.
- The instrument must expressly provide that all successive owners of the land of the covenantor are to be bound by the covenant for the benefit of the land owned by, granted by, or granted to the covenantee.
- Each act required by the covenant must relate to the use, repair, maintenance, or improvement of, or payment of taxes and assessments on, such land or some part thereof, or if the land owned or granted to each consists of undivided interests in the same parcel or parcels, the suspension of the right of partition or sale in lieu of partition for a period which is reasonable in relation to the purpose of the covenant.
- The instrument containing such covenants must be recorded in the office of the recorder of each county in which the land, or some part thereof is situated.
Properly created and recorded covenants are enforceable against a buyer even if the deed does not contain the covenant and the buyer did not have actual notice of the covenant. As properly prepared CC&Rs meet the requirements of Civil Code section 1468, an owner can be compelled to comply with them even if he or she was not aware of them at the time of purchase.
Equitable Servitudes
When covenants have failed to meet the requirements of Civil Code section 1468, the doctrine of equitable servitudes has been used to enforce such covenants. The question of whether an equitable servitude is reasonable and enforceable is very similar to the enforceability and reasonableness of a covenant and restriction. When the doctrine of equitable servitudes is used to enforce failed covenants, certain rules apply. They are:
- An equitable servitude can only be created by a deed or a written agreement. An equitable servitude cannot be created orally. The written instrument is the final and exclusive memorial of the intent to bind successors and run with the land. Any understanding not incorporated into the written instrument is “wholly immaterial” and not binding. Werner v. Graham (1919) 181 Cal. 174, 184-185.
- A servitude running with the land “cannot be created in any uncertain and indefinite fashion.” Id. at pp. 181-182. In order to have legal effect, the written instrument or deed must clearly express the intent of the parties.
- When a deed falls short or fails in its description, “[i]t is not significant that a later buyer may have purchased with notice of the restriction.” Ross v. Harootunian (19670 257 Cal.App.2d 292, 296. The fact that the buyer had actual or constructive notice of the restriction in the original deed did not create an enforceable servitude.
Enforceability
Whether considered covenants or equitable servitudes, the restrictions in the CC&Rs of a common interest development are binding and enforceable, with only a few exceptions. Provisions in CC&Rs which are illegal, for instance, or have been superseded by statute, cannot be enforced. A covenant which restricts occupancy to “a single family” is illegal, as both the Federal Fair Housing Act and California Fair Employment and Housing Act prohibit discrimination based on familial status. In fact, Association boards are mandated by law to amend any governing document which contains unlawful restrictive covenants, and can face liability for refusing to do so. Although recorded CC&Rs do not expire over time, a set which has not been updated may also contain unenforceable provisions if a statute has been amended or enacted since the time of the CC&Rs, and as a result contains stricter provisions on a particular subject. For example, CC&Rs which allow an Association to non-judicially foreclose on a property when less than $1800 is at stake have now been superseded by Civil Code section 1367.4, which disallows such practice. A covenant found in CC&Rs which is contrary to Civil Code section 1367.4 is unenforceable. On the other hand, if a statute is less strict than a CC&R provision on a particular subject, it will be the stricter provision in the CC&Rs which controls.
Non-enforcement of CC&Rs over a period of years does not eliminate any recorded covenant found therein. However, if the covenant is ambiguous, or if there are contradictory provisions found in the same set of CC&Rs, the courts will look to the non-enforcement or enforcement of a section in interpreting the meaning of the ambiguity or deciding which of the contradictory provisions is enforceable.
To avoid claims that CC&Rs cannot be enforced as written, Association boards should be careful and prudent about amending the CC&Rs when and if the document contains outdated and illegal restrictions, and to clean up any ambiguous wording.
However, it is never a defense for an owner to claim that he or she has not received or read the CC&Rs. The next time an owner asks “How can CC&Rs which I have never read or signed control what I can do with my home?”, the answer is that those CC&Rs contain covenants or equitable servitudes which are recorded on your property and which legally run with the land.
Sharon Glenn Pratt is founder of the law firm of Pratt & Associates, an ECHO member firm. She specializes in civil litigation, with extensive experience in community association law, including creation, amendment and enforcement of governing documents. Pat Wendleton also specializes in civil litigation, with substantial experience in community association construction defects and transactional law.